SCHEDULE 14A
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES
Filed by the Registrant þ
Filed by a Party other than the Registrant o
Check the appropriate box:
| o Preliminary Proxy Statement | ||
| o Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2)) | ||
| þ Definitive Proxy Statement | ||
| o Definitive Additional Materials | ||
| o Soliciting Material Pursuant to Section | ||
PIPER JAFFRAY COMPANIES
Payment of Filing Fee (Check the appropriate box):
| þ | No fee required. |
| o | Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11. |
| (1) | Title of each class of securities to which transaction applies: |
| (2) | Aggregate number of securities to which transaction applies: |
| (3) | Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (set forth the amount on which the filing fee is calculated and state how it was determined): |
| (4) | Proposed maximum aggregate value of transaction: |
| (5) | Total fee paid: |
| o | Fee paid previously with preliminary materials. |
| o | Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11( a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing. |
| (1) | Amount Previously Paid: |
| (2) | Form, Schedule or Registration Statement No.: |
| (3) | Filing Party: |
| (4) | Date Filed: |
16, 2005
| Sincerely, | |
 | |
| Chairman and Chief Executive Officer |
| NOTICE OF ANNUAL MEETING OF SHAREHOLDERS | ||
| Date and Time: | Wednesday, April | |
| Place: | 50th Floor, IDS Center Minneapolis, | |
| Items of Business: | 1. The election of | |
| 2. | ||
| Record Date: | You may vote at the meeting if you were a shareholder of record at the close of business on March | |
| Voting by Proxy: | Whether or not you plan to attend the annual meeting, |
| By Order of the Board of Directors | |
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| Appendix A | ||||
| Appendix B |
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2004
27, 2005
| • | you are present and vote in person at the meeting; or | |
| • | you have properly and timely submitted |
| • | electronically, using the Internet; | |
| • | over the telephone by calling a toll-free number; | |
| • | by completing, signing and mailing the enclosed proxy card. |
If you hold your shares in “streetstreet name,” you must vote your shares in the manner prescribed by your broker, bank, trust or other nominee. Your broker, bank, trust or other nominee has enclosed or otherwise provided a voting instruction card for you to use in directing the broker, bank, trust or other nominee how to vote your shares.What is the difference between a shareholder of record and a “street name” holder? If your shares are registered directly in your name, you are considered the shareholder of record with respect to those shares.If your shares are held in a stock brokerage account or by a bank, trust or other nominee, then In many cases, the broker, bank, trust or other nominee is consideredwill permit you to be the shareholder of record with respect to those shares. However, you still are considered the beneficial owner of those shares, andsubmit your shares are said to be held in “street name.” Street name holders generally cannot vote their shares directly and must instead instruct the broker, bank, trustvoting instructions by Internet or other nominee how to vote their shares using the method described above under “How do I submit my proxy vote?”telephone.
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| • | FORboth of the nominees for director; and | |
| • | FORthe ratification of the selection of Ernst & Young LLP as Piper Jaffray’s independent auditor for the year ending December 31, 2005. |
| • | FORboth of the nominees for director; and | |
| • | FORthe ratification of the selection of Ernst & Young LLP as Piper Jaffray’s independent auditor for the year ending December 31, 2005. |
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| • | by submitting a later-dated proxy by Internet or telephone before the deadline set forth on the enclosed proxy card; | |
| • | by submitting a later-dated proxy to the secretary of Piper Jaffray Companies, which must be received by us before the time of the annual meeting; | |
| • | by sending a written notice of revocation to the secretary of Piper Jaffray Companies, which must be received by us before the time of the annual meeting; or | |
| • | by voting in person at the meeting. |
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The affirmative vote of the holders of a majority of the outstanding shares of common stock present in person or represented by proxy and entitled to vote at the annual meeting is required to approve our Amended and Restated 2003 Annual and Long-Term Incentive Plan and to ratify the selection of our independent auditors.auditor.
proposal. If you properly submit your proxy but abstain from voting on one or more matters or withhold authority to vote for one or more director nominees or abstain from voting on the proposal to ratify the selection of our independent auditor, your shares will be counted as present at the meeting for the purpose of determining a quorum. Your shares also will be counted as present at the meeting for the purpose of calculating the vote on the particular matter with respect to which you abstained from voting or withheld authority to vote.
If you abstain from voting on a proposal, your abstention has the same effect as a vote against that proposal.
The New York Stock Exchange permits a member broker who holds shares in street name for customers to vote on certain items even if the broker has not received instructions If you abstain from the beneficial owner of the shares. However, New York Stock Exchange rules do not permit member brokers to votevoting on the proposal to approve our Amended and Restated 2003 Annual and Long-Term Incentive Plan unlessratify the broker has received instructions from the beneficial owner of the shares. Broker non-votes will have no effect on the outcome of the proposal regarding our Amended and Restated 2003 Annual and Long-Term Incentive Plan.
In addition, the New York Stock Exchange restricts the voting of shares held in street name by Piper Jaffray & Co., our broker dealer subsidiary, because of our relationship with this member broker. Accordingly, if Piper Jaffray & Co. does not receive voting instructions regarding shares held by it in street name with respect to the election of directors and ratification of the appointmentselection of our independent auditors, it is entitled to vote these shares only inauditor, your abstention has the same proportioneffect as the shares represented by the votes cast by all shareholders of record with respect to eacha vote against that proposal.
The Board of Directors recommends a vote:
What if I do not specify how I want my shares voted?
If you submit a signed proxy card or submit your proxy by telephone or Internet but do not specify how you want to vote your shares, we will vote your shares:
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Can I change my vote after submitting my proxy?
Yes. You may revoke your proxy and change your vote at any time before your proxy is voted at the annual meeting, in any of the following ways:
Will my vote be kept confidential?
| • | all proxies, ballots and voting tabulations that identify shareholders are kept permanently confidential, except as disclosure may be required by federal or state law or expressly permitted by a shareholder; and | |
| • | voting tabulations are performed by an independent third party. |
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We are soliciting proxies primarily by mail. In addition, our directors, officers and regular employees may solicit proxies by telephone or facsimile or personally. These individuals will receive no additional compensation for their services other than their regular compensation.
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Our executive officers and directors are encouraged to own Piper Jaffray stock to further align management’s and shareholders’ interests. Piper Jaffray’s guideline for members of senior management is share ownership in an amount having a market value ranging from two to seven times the individual’s annual base salary, depending upon the individual’s position, to be achieved within five years of becoming subject to the guidelines. Our Compensation Committee also has established a guideline providing for ownership by non-employee directors in an amount equal to two times the director’s annual cash retainer, to be achieved within three years after the director’s initial election to the Board.
The following table shows how many shares of our common stock were beneficially owned as of March 3, 2004, by each of our directors, director nominees and executive officers named in the Summary Compensation Table in this proxy statement, and by all of our directors and executive officers as a group. To the best of our knowledge, no shareholder beneficially owned more than five percent of our common stock as of March 3, 2004. Unless otherwise noted, the shareholders listed in the table have sole voting and investment power with respect to the shares of common stock owned by them.
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SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934 requires our executive officers and directors to file initial reports of ownership and reports of changes in ownership of our securities with the Securities and Exchange Commission. Executive officers and directors are required to furnish us with copies of these reports. Based on our knowledge and on written representations from the executive officers and directors, we believe that all Section 16(a) filing requirements applicable to our executive officers and directors for 2003 were satisfied, except that Form 3 reports with respect to Michael R. Francis, B. Kristine Johnson, Samuel L. Kaplan, Frank L. Sims and Richard A. Zona were not filed on a timely basis due to an administrative error by Piper Jaffray.
ITEM 1 — ELECTION OF DIRECTORS
If, for any reason, any nominee becomes unable to serve before the election, the persons named as proxies willmay vote your shares for a substitute nominee selected by the Board of Directors. Alternatively, the Board of Directors, at its option, may reduce the number of directors constituting Class I directors.
The three nominees for director receiving a plurality of the votes cast at the meeting in person or by proxy shall be elected.
SAMUEL L. KAPLAN: Age 67, director since December 31, 2003. Mr. Kaplan is currently a partner with the law firm of Kaplan, Strangis and Kaplan, P.A., Minneapolis, Minnesota. Mr. Kaplan is a founding member of the firm, which was established in 1978, and has served as its President continuously since that time. Mr. Kaplan also is a member of the board of directors of Vyyo Inc.
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FRANK L. SIMS: Age 53, director since December 31, 2003. Mr. Sims is corporate vice president, transportation and product assurance for Cargill, Inc., Minneapolis, Minnesota, a marketer and distributor of agricultural and industrial products and services. Mr. Sims joined Cargill in 1972 and served in various roles before attaining his current position in 2001. Most recently, he was president of Cargill’s North American Grain Division from 1998 to 2000. Mr. Sims also is a member of the boards of directors of the Federal Reserve Bank of Minneapolis and Tennant Company.
CLASS II DIRECTORS — TERMS ENDING IN 2005
ADDISON L. PIPER: Age 57, vice chairman since December 31, 2003. Mr. Piper has worked for Piper Jaffray since 1969, serving as assistant syndicate manager, director of securities trading and director of sales and marketing. He served as chief executive officer from 1983 to 2000 and served as chairman from 1988 to 2003. Since 1998, Mr. Piper also has had responsibility for our venture and private capital fund activities. Mr. Piper also is a member of the board of directors of Renaissance Learning Corporation.
MICHAEL R. FRANCIS:Age 41,42, director since December 31, 2003. Since 2003, Mr. Francis has served as executive vice president, marketing for Target Corporation. Target Corporation Minneapolis, Minnesota, an operator of large-storeoperates Target-brand general merchandise formats, including discount stores moderate-priced promotional and traditional department stores, and a direct mail and on-line business.an online business, Target.com. Mr. Francis began his career with Marshall Field’s department stores in 1985 and has been with Target Corporation since its acquisition of Marshall Field’s in 1990. He previously served Target Corporation as senior vice president, marketing from 2001 to 2003 and as senior vice president, marketing and visual presentation of the department store division from 1995 to 2001. Prior to that, he held a variety of positions within Target Corporation’s advertising division. Mr. Francis also is a member of the board of directors of Department 56, Inc.
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| (1) | the director does not have any relationship described in Rule 303A.02(b) of the New York Stock Exchange corporate governance rules; | |
| (2) | in the event the director has a relationship that is not of a type described in the Director Independence Standards or that exceeds the limits of the relationships described in the Director Independence Standards, the Board determines in its judgment, after broad consideration of all relevant facts and circumstances, that the relationship is not material; and | |
| (3) | the Board reviews all commercial, banking, consulting, legal, accounting, charitable, familial and other relationships the director has with Piper Jaffray that are not of a type described in the Director Independence Standards and determines in its judgment, after broad consideration of all relevant facts and circumstances, that the relationship is not material. |
As a result of this review the Board affirmatively determinedour Director Independence Standards, that each of our non-employee directors (Michael R. Francis, B. Kristine Johnson, Samuel L. Kaplan, Frank L. Sims and Richard A. Zona) is “independent” as that term is defined in the applicable New York Stock Exchange listing standards.rules. None of the non-employee directors has a relationship described in Rule 303A.02(b) of the New York Stock Exchange rules, and with the exception of one relationship between Piper Jaffray and Ms. Johnson, every relationship between Piper Jaffray and the non-employee directors is of a type described in the Director Independence Standards and does not exceed the limits set forth in the Director Independence Standards. Ms. Johnson’s brother, Paul V. Olson, is employed by us as a financial advisor in the private client services business of our broker-dealer subsidiary. The Board broadly considered all the relevant facts and circumstances of this relationship, including the fact that Mr. Olson is not an executive officer of our company or of our broker-dealer subsidiary and the Board’s determination that in her role as a director, Ms. Johnson exercises independent judgment that is not unduly influenced by management. After this analysis, the Board affirmatively determined in its judgment that this relationship is not material and that Ms. Johnson is independent.
In addition to the committees of
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Audit Committee
| Audit Committee |
| Members: | Richard A. Zona,Chairperson B. Kristine Johnson Frank L. Sims |
The Audit Committee’s purpose is to oversee the integrity of our financial statements, the independent auditor’s qualifications and independence, the performance of our internal audit function and independent auditor, and compliance with legal and regulatory requirements. The Audit Committee has sole authority to retain and terminate the independent auditor and is a separate committee establisheddirectly responsible for the compensation and oversight of the work of the independent auditor. The Audit Committee meets with management and the independent auditor to review and discuss the annual audited and quarterly unaudited financial statements, reviews the integrity of our accounting and financial reporting processes and audits of our financial statements, and prepares the Audit Committee Report included in the proxy statement in accordance with Section 3(a)(58)(A)the rules and regulations of the Securities and Exchange ActCommission. The responsibilities of 1934.the Audit Committee are more fully described in the Committee’s charter, which is included as Appendix B to this proxy statement. The Audit Committee met nine times during 2004.
The Audit Committee’s purpose is to oversee the independent auditor’s qualifications and independence, the integrity of our financial statements, the performance of our internal audit function and independent auditors and compliance with legal and regulatory requirements. The Audit Committee has sole authority to retain and terminate the independent auditors and is directly responsible for the compensation and oversight of the work of the independent auditors. The Audit
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Compensation Committee
| Compensation Committee |
| Members: | Michael R. Francis,Chairperson Frank L. Sims Richard A. Zona |
The Board of Directors has determined that all members of the Compensation Committee are “independent” as that term is defined in applicable New York Stock Exchange listing standards. The Compensation Committee discharges the Board’s responsibilities relating to compensation of the executive officers, oversees succession planning for the executive officers jointly with the Nominating and Governance Committee and ensures that the company’sour compensation and employee benefit programs comply with our compensation and benefits philosophy. The Committee reviews and evaluates our compensation philosophy, goals and objectives, generally, and it approves corporate goals related to the compensation of the chief executive officer, evaluates the chief executive officer’s performance and compensatesdetermines the compensation of the chief executive officer based on this evaluation. The Committee also reviews and approves compensation and compensatory arrangements applicable to our other executive officers and jointly with the Nominating and Governance Committee, oversees succession planning for the executive officers. In addition, the Committee is responsible for recommending stock ownership guidelines for the executive officers and directors, for recommending the compensation and benefits to be provided to our non-employee directors, for reviewing and recommending the establishment of broad-based incentive compensation, equity-based, retirement or other material employee benefit plans, and for discharging any duties under the terms of compensation or benefit plansthese plans. The responsibilities of Piper Jaffray.the Compensation Committee are more fully described in the Committee’s charter. The Compensation Committee has adopted and operates under a written charter, which is available on our Web site at www.piperjaffray.com. The Compensation Committee did not meetmet five times during 2003 because Piper Jaffray was not yet an independent company.
Nominating and Governance Committee
2004. The Board of Directors has determined that all members of the Nominating and GovernanceCompensation Committee are “independent” as that term is defined in applicable New York Stock Exchange listing standards.rules.
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| Nominating and Governance Committee |
| Members: | Samuel L. Kaplan,Chairperson Michael R. Francis B. Kristine Johnson |
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In
$5,000.
Our
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committees of the Board.
www.piperjaffray.com and is available in print to any shareholder who requests it.
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Compensation Philosophy
Given the critical importance of human capital to our business, the
| Compensation Philosophy |
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organizations in our industry.
This is particularly true in a human capital business like Piper Jaffray, where the performance of individual employees can have a direct and meaningful effect on financial performance and on the company’s culture. This philosophy is reflected in our compensation program for executive officers as well as for employees generally.
| Executive Officer Compensation Program |
| Base Salary |
not variable in nature and is competitive with market practices. Base Salary
salaries for the executive officers are reviewed annually by the Compensation Committee. Adjustments are based on each executive officer’s performance for the prior year, his or her experience, expertise and position within the company, and compensation levels for comparable positions at comparable public companies and other companies in the securities industry with whom the company competes, as reported in external compensation sources. Consistent with industry practice, the base salariessalary for oureach of the company’s executive officers generally accountaccounts for a relatively small portion of theirhis or her overall compensation. Executive officer base salaries and subsequent adjustments are expected to be determined by the Committee annually, based on a review of relevant market data and each executive’s performance for the prior year, as well as each executive’s experience, expertise and internal positioning. In addition, the Committee will consider salary adjustments for the organization’s broader employee population.
Annual Incentive Compensation
Annual incentives are
| Annual Incentive Compensation |
Annual incentive awards for the CEO and other executive officers for 2004 will be based on performance goals established by the Committee using one or more performance criteria contained in the Amended and Restated 2003 Annual and Long-Term Incentive Plan (which is presented in this proxy statement for approval by shareholders). It is expected that a portion of the annual bonus will continue to be paid in restricted stock.Plan.
Long-Term Incentives
Piper Jaffray believes the use of significant equity-based awards as part of the compensation program will support the achievement of the company’s long-term objectives and shareholder value creation, further align executive and shareholder interests, and promote executive ownership.
During 2003 no equity incentives were granted to Piper Jaffray executives. In FebruaryMarch 2004, the Committee approvedestablished the performance goals for the 2004 annual incentive program. For 2004, each executive officer was entitled to receive annual incentive compensation based on the company’s pre-tax operating income for the year, as adjusted to eliminate certain compensation and benefits expenses and certain other expenses, losses, income or gains that are unusual in nature or infrequent in occurrence. The specific amount paid to each executive officer was determined based on his or her performance against individualized, weighted performance goals relating to company-wide and business unit operating performance and individual performance against a personalized performance plan.
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| Long-Term Incentive Awards |
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22, 2008.
Executive Stock Ownership
Piper Jaffray hasExecutive Stock Ownership We have adopted stock ownership guidelines to increase theensure that each executive officers’officer maintains a meaningful equity stake in the company and align their interests more closely with those of the shareholders.company. The guidelines provide for the executive officers to increase their ownership of Piper Jaffray Companies stock to a face value equal to seven times base salary for the CEO,chief executive officer, and two to five times salary for the other executive officers, depending on the executive officer’s position.individual’s position, within five years after becoming subject to the guidelines. In addition to the ownership guidelines, we have adopted a share retention policy requiring executivesthe executive officers to hold at least 50% of the shares awarded to them through the companycompany’s incentive plans, net of taxes and transaction costs, for a period of five years.Chief Executive Officer Compensation In an effort to continue to promotedetermining Mr. Duff’s incentive compensation for 2004 and his base salary for 2005, the Compensation Committee took the following steps:• Reviewed the financial performance and the total relative shareholder return of Piper Jaffray Companies, comparable public companies and other companies in the securities industry with whom Piper Jaffray competes; • Analyzed data regarding the types and amount of compensation, including incentive compensation, paid to the chief executive officers of comparable public companies and other companies in the securities industry with whom Piper Jaffray competes; • Reviewed historical compensation information for Mr. Duff, including past grants of equity; • Considered feedback from Mr. Duff, other members of management, and the Board of Directors regarding Mr. Duff’s performance for 2004; and • Independently evaluated Mr. Duff’s performance as chief executive officer against the 2004 performance goals and objectives established for him by the Compensation Committee. After completing this process, the Compensation Committee approved compensation for Mr. Duff under the annual incentive program in the amount of $2,497,500, consisting of $1,350,000 in cash
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CEO Compensation for Fiscal 2003
In 2003equity in lieu of cash, Mr. Duff received 50% of his total incentive compensation in equity and the remaining 50% in cash. The number of shares of restricted stock was paiddetermined based on the closing price of the company’s common stock on February 22, 2005, and the number of shares underlying the stock option was based on the Black-Scholes value of the option on that date. The restricted stock and options fully vest in February 2008.
Mr. Duff received an annual bonus of $2,355,000 for 2003. The annual bonus payment was based on the company’s improved financial and operational performance, and Mr. Duff’s leadership in preparing the company for its successful spin-off from U.S. Bancorp. In a year that was a transition for the organization, the company delivered significant growth in net revenues, net income and earnings per share over 2002. In addition, in December Piper Jaffray successfully completed its spin-off from U.S. Bancorp to become an independent publicly traded company. In determining the 2003 bonus, the Committee examined reliable external data and determined a fair and competitive bonus relative to industry practices for CEOs of other free-standing, publicly traded financial services organizations, and considered Mr. Duff’s compensation history as a U.S. Bancorp employee.
Consistent with the philosophy for other executive officers, 25% of Mr. Duff’s annual bonus was paid in restricted stock in lieu of cash, which will fully vest in February 2007. In addition, Mr. Duff received 24,259 stock options.his prior-year performance.
Policy on Qualifying Compensation for Deductibility
| Policy on Qualifying Compensation for Deductibility |
the interests of shareholders.
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In all cases, the payments are conditioned on the award recipient’s continued employment with Piper Jaffray on the payment date, except that Piper Jaffray will continue to pay the benefits in limited circumstances after employment has terminated. Specifically, Piper Jaffray will continue to pay the cash awards in the event thatif the recipient’s employment is terminated by reason of death, or disability or retirement, or is terminated without cause during the 24-month period following a change in control of Piper Jaffray. In addition, in the event that the recipient is eligible for retirement (as defined in theAs a result of his resignation from Piper Jaffray, Mr. Grangaard will forfeit his cash award agreement), Piper Jaffray will pay the cash award regardless of whether the recipient remains employed with Piper Jaffray.
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payments for 2006, 2007 and 2008.
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| Long-Term Compensation Awards | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Long-Term Compensation Awards | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Awards | Payouts | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Annual Compensation | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Awards | Payouts | Number of | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Annual Compensation | Other Annual | Restricted Stock | Securities | All Other | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Number of | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Other Annual | Restricted Stock | Securities | All Other | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Salary | Compensation | Award(1)(2) | Underlying | Compensation | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Year | ($) | Bonus ($) | ($) | ($) | Options(2) | ($) | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Name and Principal | Name and Principal | Salary | Bonus | Compensation | Award(3) | Underlying | Compensation(6) | |||||||||||||||||||||||||||||||||||||||||||||||||||
| Position | Position | Year | ($) | ($) | ($) | ($) | Options(4)(5) | ($) | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Andrew S. Duff | Andrew S. Duff | 2003 | 379,700 | 2,266,250 | (3) | — | 632,765 | — | 4,575,191 | (4) | Andrew S. Duff | 2004 | 380,000 | 1,350,000 | — | 1,147,500 | 11,719 | 6,070 | ||||||||||||||||||||||||||||||||||||||||
| Chairman and CEO | 2002 | 378,200 | 225,000 | — | — | — | 3,680 | (5) | Chairman and CEO | 2003 | 379,700 | 2,266,250 | (1) | — | 632,765 | 24,940 | 4,575,191 | |||||||||||||||||||||||||||||||||||||||||
| 2001 | 375,000 | 275,000 | 558 | — | — | — | 2002 | 378,200 | 225,000 | — | — | — | 3,680 | |||||||||||||||||||||||||||||||||||||||||||||
| Paul D. Grangaard | Paul D. Grangaard | 2003 | 203,200 | 566,250 | 24,275 | (6) | 202,873 | — | 286,680 | (7) | Paul D. Grangaard | 2004 | 204,700 | 687,500 | 12,903 | (2) | 478,125 | 4,883 | 9,586 | |||||||||||||||||||||||||||||||||||||||
| Head of Private Client | 2002 | 203,200 | 650,000 | 72,500 | (6) | — | — | 8,000 | (8) | Head of Private Client | 2003 | 203,200 | 566,250 | 24,275 | (2) | 202,873 | 1,938 | 286,680 | ||||||||||||||||||||||||||||||||||||||||
| Services | 2001 | 200,000 | 2,360,000 | 36,750 | (6) | — | — | 6,800 | (8) | Services | 2002 | 203,200 | 650,000 | 72,500 | (2) | — | — | 8,000 | ||||||||||||||||||||||||||||||||||||||||
| Barry J. Nordstrand | Barry J. Nordstrand | 2003 | 178,200 | 1,278,750 | — | 458,123 | — | 42,489 | (9) | Barry J. Nordstrand | 2004 | 200,533 | 495,000 | — | 344,250 | 3,516 | 9,496 | |||||||||||||||||||||||||||||||||||||||||
| Head of Fixed Income | 2002 | 178,200 | 1,025,000 | — | — | — | 8,000 | (8) | Head of Fixed Income | 2003 | 178,200 | 1,278,750 | — | 458,123 | 1,938 | 42,489 | ||||||||||||||||||||||||||||||||||||||||||
| 2001 | 175,000 | 875,000 | — | — | — | 6,800 | (8) | 2002 | 178,200 | 1,025,000 | — | — | — | 8,000 | ||||||||||||||||||||||||||||||||||||||||||||
| Robert W. Peterson | Robert W. Peterson | 2003 | 163,200 | 922,500 | 8,625 | (6) | 330,498 | — | 575,717 | (10) | Robert W. Peterson | 2004 | 198,033 | 880,000 | 3,287 | (2) | 612,000 | 6,250 | 9,478 | |||||||||||||||||||||||||||||||||||||||
| Head of Investment | 2002 | 163,200 | 946,800 | 25,750 | (6) | — | — | 8,000 | (8) | Head of Investment | 2003 | 163,200 | 922,500 | 8,625 | (2) | 330,498 | 1,938 | 575,717 | ||||||||||||||||||||||||||||||||||||||||
| Research | 2001 | 193,333 | 1,585,000 | 18,375 | (6) | — | — | 6,800 | (8) | Research | 2002 | 163,200 | 946,800 | 25,750 | (2) | — | — | 8,000 | ||||||||||||||||||||||||||||||||||||||||
| Thomas P. Schnettler | Thomas P. Schnettler | 2003 | 163,200 | 1,391,250 | 37,225 | (6) | 498,452 | — | 260,279 | (11) | Thomas P. Schnettler | 2004 | 198,033 | 1,787,500 | 12,271 | (2) | 1,243,125 | 12,696 | 9,586 | |||||||||||||||||||||||||||||||||||||||
| Head of Equities and | 2002 | 163,200 | 1,200,000 | 72,950 | (6) | — | — | 8,000 | (8) | Head of Equities and | 2003 | 163,200 | 1,391,250 | 37,225 | (2) | 498,452 | 1,938 | 260,279 | ||||||||||||||||||||||||||||||||||||||||
| Investment Banking | 2001 | 190,000 | 2,460,000 | 95,099 | (6) | — | — | 6,800 | (8) | Investment Banking | 2002 | 163,200 | 1,200,000 | 72,950 | (2) | — | — | 8,000 | ||||||||||||||||||||||||||||||||||||||||
| (1) | Consists of (a) a cash bonus of $1,766,250 and (b) a discretionary cash award of $500,000 granted in connection with our spin-off from U.S. Bancorp. The discretionary award is payable in four equal installments on each of March 31, 2004, 2005, 2006 and 2007, so long as Mr. Duff remains employed by Piper Jaffray on each payment date. See “ — Cash Award Agreement in Connection with Our Spin-Off from U.S. Bancorp” above. |
| (2) | Consists of amounts paid under the U.S. Bancorp Piper Jaffray Inc. Second Century Growth Deferred Compensation Plan (As Amended and Restated Effective September 30, 1998) and the U.S. Bancorp Piper Jaffray Inc. Second Century 2000 Deferred Compensation Plan. Certain key employees were eligible to participate in these plans. Under the plans, participants were granted a deferred bonus award, which was deemed invested in certain measuring investments. Following a liquidity event (as defined in the plans) for a particular measuring investment, the participant receives a benefit payment based on the deemed return to the participant with respect to the measuring investment as well as payment of that portion of the participant’s account that was deemed invested. Participants may |
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| continue to receive payments under the plans until a liquidity or bankruptcy event has occurred with respect to each measuring investment in which deferred bonus awards are deemed to be invested. Messrs. Grangaard, Peterson and Schnettler were granted deferred bonus awards under these plans in 1996, 1997, 1998 and/or 2000. | |
| The |
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| The value of each officer’s aggregate restricted stock holdings at December 31, 2004, as determined based on a closing price of $47.95 for our common stock on December 31, 2004, and the number of restricted shares held as of December 31, 2004 were: for Mr. Duff, $596,882 and 12,448 shares; for Mr. Grangaard, $191,368 and 3,991 shares; for Mr. Nordstrand, $432,125 and 9,012 shares; for Mr. Peterson, $311,771 and 6,502 shares; and for Mr. Schnettler, $470,150 and 9,805 shares. |
| (4) | The 2004 and 2003 entries for the number of securities underlying options reflect stock option awards granted to the executive officers on February 22, 2005 and February 12, 2004, respectively. These awards were not part of the annual incentive compensation paid to the executive officers for 2004 and 2003, but were granted at the same time the annual incentive compensation was awarded. Mr. Grangaard will forfeit his stock option awards at the time of his resignation. |
| The table excludes |
As required by SEC rules, the restricted stock award values that are reported in the table below were determined by multiplying the closing sales price of one share of U.S. Bancorp common stock on the date of grant by the number of shares awarded. On February 27, 2001, each of Messrs. Grangaard, Peterson and Schnettler was granted aadjusted number of shares of U.S. Bancorp restricted stock, as follows: Mr. Grangaard, 50,747 shares; Mr. Peterson, 18,815 shares; and Mr. Schnettler, 30,704 shares. One-third of these shares vested on each of February 27, 2002, 2003 and 2004. Mr. Duff was granted 51,308 shares of U.S. Bancorp restricted stock on December 18, 2001, of which 25,654 shares vested on December 18, 2003, and the remainder were forfeited on December 31, 2003, in connection with our spin-off from U.S. Bancorp. The number of shares awarded to Mr. Duff was determined by dividing $1,000,000 by $19.49, the average closing price of U.S. Bancorp common stock for the 10 consecutive trading days ended December 17, 2001.
On December 31, 2003, Mr. Duff held 71,394 shares of U.S. Bancorp restricted stock with a market value of $2,096,128 (calculated by multiplying the closing sales price of U.S. Bancorp common stock on that date by the total number of restricted shares held). Under the terms of the applicable restricted stock awards, the unvested portion of the award would be forfeited upon a termination of Mr. Duff’s employment. Because our spin-off from U.S. Bancorp on December 31, 2003, was deemed a termination of employment of our employees from the perspective of U.S. Bancorp, Mr. Duff forfeited the 71,394 shares of U.S. Bancorp restricted stock on that date. The other named executive officers held a number of shares of restricted stock of U.S. Bancorp on December 31, 2003, with market values (calculated by multiplying the closing market price of U.S. Bancorp’s common stock on that date by the total number of restricted shares held by each officer) as follows: Mr. Grangaard, 16,915 shares valued at $503,729; Mr. Peterson, 6,200 shares valued at $184,636; and Mr. Schnettler, 10,234 shares valued at $304,769. Under the terms of these awards, the awards were not forfeited
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| Restricted Stock | Number of | |||||||||||
| Award | Securities | |||||||||||
| Year | ($) | Underlying Options | ||||||||||
| Andrew S. Duff | 2003 | — | — | |||||||||
| 2002 | — | — | ||||||||||
| 2001 | 1,004,610 | 171,156 | ||||||||||
| Paul D. Grangaard | 2003 | — | — | |||||||||
| 2002 | — | 12,912 | ||||||||||
| 2001 | 1,190,017 | 12,826 | ||||||||||
| Barry J. Nordstrand | 2003 | — | — | |||||||||
| 2002 | — | 24,651 | ||||||||||
| 2001 | — | 15,675 | ||||||||||
| Robert W. Peterson | 2003 | — | — | |||||||||
| 2002 | — | 12,428 | ||||||||||
| 2001 | 441,212 | 12,826 | ||||||||||
| Thomas P. Schnettler | 2003 | — | — | |||||||||
| 2002 | — | 12,428 | ||||||||||
| 2001 | 720,009 | 12,826 | ||||||||||
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| (6) | All other compensation consists of the following: |
| Andrew S. | Paul D. | Barry J. | Robert W. | Thomas P. | ||||||||||||||||||
| Form of All Other Compensation | Year | Duff | Grangaard | Nordstrand | Peterson | Schnettler | ||||||||||||||||
| Cash award replacing value lost as | 2004 | — | — | — | — | — | ||||||||||||||||
| a result of the expiration or | 2003 | $ | 4,567,096 | $ | 270,585 | $ | 26,394 | $ | 559,622 | $ | 244,184 | |||||||||||
| forfeiture of U.S. Bancorp stock | 2002 | — | — | — | — | — | ||||||||||||||||
| options and/or restricted stock in connection with our spin-off | ||||||||||||||||||||||
| Matching contributions made | 2004 | — | $ | 3,516 | $ | 3,516 | $ | 3,516 | $ | 3,516 | ||||||||||||
| under the 401(k) component of | 2003 | — | $ | 8,000 | $ | 8,000 | $ | 8,000 | $ | 8,000 | ||||||||||||
| the Piper Jaffray Companies | 2002 | — | $ | 8,000 | $ | 8,000 | $ | 8,000 | $ | 8,000 | ||||||||||||
| Retirement Plan (for 2004) or the U.S. Bancorp 401(k) Savings Plan (for 2003 and 2002) | ||||||||||||||||||||||
| Profit-sharing contribution made | 2004 | $ | 5,125 | $ | 5,125 | $ | 5,125 | $ | 5,125 | $ | 5,125 | |||||||||||
| under the Piper Jaffray Companies | 2003 | $ | 7,825 | $ | 7,825 | $ | 7,825 | $ | 7,825 | $ | 7,825 | |||||||||||
| Retirement Plan | 2002 | — | — | — | — | — | ||||||||||||||||
| Life Insurance Allowance | 2004 | $ | 270 | $ | 270 | $ | 180 | $ | 162 | $ | 270 | |||||||||||
| 2003 | $ | 270 | $ | 270 | $ | 270 | $ | 270 | $ | 270 | ||||||||||||
| 2002 | $ | 3,241 | — | — | — | — | ||||||||||||||||
| Long-Term Disability Insurance | 2004 | $ | 675 | $ | 675 | $ | 675 | $ | 675 | $ | 675 | |||||||||||
| Allowance | 2003 | — | — | — | — | — | ||||||||||||||||
| 2002 | — | — | — | — | — | |||||||||||||||||
| Insurance Premium Rebate | 2004 | — | — | — | — | — | ||||||||||||||||
| 2003 | — | — | — | — | — | |||||||||||||||||
| 2002 | $ | 429 | — | — | — | — | ||||||||||||||||
No stock optionsthe table is the lesser of either $50,000 or 10% of the total annual salary and bonus reported for each such officer, and therefore is not required to purchase sharesbe included under regulations of Piper Jaffray or U.S. Bancorp stock were granted during 2003 to any ofthe Securities and Exchange Commission. The perquisites received in 2004 by our executive officers named in the Summary Compensation Table.Table consist of reimbursement for the cost of a parking space and, for some of our executive officers, reimbursement for a portion of the dues paid by them for business-related club membership. The Company’s cost for these perquisites in 2004 did not exceed $7,000 for any individual executive officer.
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| Individual Grants | ||||||||||||||||||||||||
| Percent of | ||||||||||||||||||||||||
| Number of | Total Options | Closing Market | ||||||||||||||||||||||
| Securities | Granted to | Exercise Price | Price on Date | Grant Date | ||||||||||||||||||||
| Underlying | Employees in | per Share | of Grant | Present Value | ||||||||||||||||||||
| Name | Options Granted | Fiscal Year | ($) | ($) | Expiration Date | ($) | ||||||||||||||||||
| Andrew S. Duff | 11,719 | 2.98 | (1) | 39.62 | (3) | 39.62 | February 22, 2015 | 202,504 | (5) | |||||||||||||||
| 24,940 | 8.29 | (2) | 47.30 | (4) | 51.05 | February 12, 2014 | 542,694 | (6) | ||||||||||||||||
| Paul D. Grangaard | 4,883 | 1.24 | (1) | 39.62 | (3) | 39.62 | February 22, 2015 | 84,378 | (5) | |||||||||||||||
| 1,938 | 0.64 | (2) | 47.30 | (4) | 51.05 | February 12, 2014 | 42,171 | (6) | ||||||||||||||||
| Barry J. Nordstrand | 3,516 | 0.89 | (1) | 39.62 | (3) | 39.62 | February 22, 2015 | 60,756 | (5) | |||||||||||||||
| 1,938 | 0.64 | (2) | 47.30 | (4) | 51.05 | February 12, 2014 | 42,171 | (6) | ||||||||||||||||
| Robert W. Peterson | 6,250 | 1.59 | (1) | 39.62 | (3) | 39.62 | February 22, 2015 | 108,000 | (5) | |||||||||||||||
| 1,938 | 0.64 | (2) | 47.30 | (4) | 51.05 | February 12, 2014 | 42,171 | (6) | ||||||||||||||||
| Thomas P. Schnettler | 12,696 | 3.22 | (1) | 39.62 | (3) | 39.62 | February 22, 2015 | 219,387 | (5) | |||||||||||||||
| 1,938 | 0.64 | (2) | 47.30 | (4) | 51.05 | February 12, 2014 | 42,171 | (6) | ||||||||||||||||
| (1) | Based on options granted to employees during 2005 through March 2, 2005, to purchase a total of 393,786 shares of our common stock. |
| (2) | Based on options granted to employees during 2004 to purchase a total of 300,980 shares of our common stock. |
| (3) | The exercise price is the closing price of our common stock on February 22, 2005. |
| (4) | The exercise price is the average closing price of our common stock for the five consecutive trading days ended February 11, 2004. |
| (5) | The options to purchase shares of Piper Jaffray Companies common stock granted on February 22, 2005, were valued using a Black-Scholes option pricing method that assumed a risk-free interest rate of 3.76%, a dividend yield of zero, a stock volatility factor of 38.57% and an expected life of the options of six years, resulting in an option value of $17.28. |
| (6) | The options to purchase shares of Piper Jaffray Companies common stock granted on February 12, 2004, were valued using a Black-Scholes option pricing method that assumed a risk-free interest rate of 3.25%, a dividend yield of zero, a stock volatility factor of 39.92% and an expected life of the options of six years, resulting in an option value of $21.76. |
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| Number of Securities | Value of Unexercised | |||||||||||||||
| Underlying Unexercised | In-the-Money Options | |||||||||||||||
| Options at Fiscal Year-End | at Fiscal Year-End(1) | |||||||||||||||
| Name | Exercisable | Unexercisable | Exercisable | Unexercisable | ||||||||||||
| Andrew S. Duff | — | 24,940 | — | $ | 16,211 | |||||||||||
| Paul D. Grangaard | — | 1,938 | — | $ | 1,260 | |||||||||||
| Barry J. Nordstrand | — | 1,938 | — | $ | 1,260 | |||||||||||
| Robert W. Peterson | — | 1,938 | — | $ | 1,260 | |||||||||||
| Thomas P. Schnettler | — | 1,938 | — | $ | 1,260 | |||||||||||
| (1) | The value of unexercised in-the-money options at fiscal year-end was calculated based on the difference between the closing price of our common stock on December 31, 2004 of $47.95, and the option exercise price of $47.30, multiplied by the number of shares underlying each option. |
| Number of Shares | ||||||||||||
| Remaining for | ||||||||||||
| Number of Shares | Future Issuance | |||||||||||
| to Be Issued Upon | Weighted-Average | Under Equity | ||||||||||
| Exercise of | Exercise Price of | Compensation | ||||||||||
| Outstanding | Outstanding Options, | Plans (Excluding | ||||||||||
| Options, Warrants | Warrants and | Shares in First | ||||||||||
| Plan Category | and Rights (#) | Rights ($) | Column) (#) | |||||||||
| Equity compensation plans approved by shareholders | 295,683 | $ | 47.50 | 3,272,432 | (1) | |||||||
| Equity compensation plans not approved by shareholders | N/A | N/A | N/A | |||||||||
| (1) | A total of 4,100,000 shares currently are authorized for issuance under the plan. In addition to the 295,683 shares to be issued upon the exercise of outstanding options to purchase our common stock, 531,885 shares of restricted stock that have been issued under the plan were outstanding as of December 31, 2004. All of the 3,272,432 shares available for future issuance under the plan as of December 31, 2004, may be granted in the form of restricted stock, restricted stock units, options or another equity-based award authorized under the plan. |
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Although no new benefits will be accrued by our employees under the U.S. Bancorp pension and excess plans, any benefits previously earned under those plans have been preserved. Employees will
18
The aggregate benefits accrued toaccount balances for our named executive officers as of December 31, 2003,2004, under U.S. Bancorp’s cash balance pension plan areour Non-Qualified Retirement Plan were as follows: to Mr. Duff, $31,981; to$380,412; Mr. Grangaard, $33,217; to$921,111; Mr. Nordstrand, $31,981; to$89,260; Mr. Peterson, $31,981;$357,212; and to Mr. Schnettler, $32,734.$647,115.
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22
| Executive Officers |
| Non-Employee Directors |
23
| Phantom Shares | ||||||||
| Shares of | Counted Towards | |||||||
| Piper Jaffray | Director Stock | |||||||
| Name of Beneficial Owner | Common Stock* | Ownership Guidelines** | ||||||
| Andrew S. Duff | 47,267 | (1) | — | |||||
| Michael R. Francis | 4,205 | (2) | 584 | |||||
| Paul D. Grangaard | 16,415 | (3) | — | |||||
| B. Kristine Johnson | 4,705 | (4) | — | |||||
| Samuel L. Kaplan | 10,248 | (5) | 1,168 | |||||
| Barry J. Nordstrand | 17,947 | (6) | — | |||||
| Robert W. Peterson | 22,228 | (7) | — | |||||
| Addison L. Piper | 8,666 | (8) | — | |||||
| Thomas P. Schnettler | 41,416 | (9) | — | |||||
| Frank L. Sims | 6,705 | (10) | — | |||||
| Richard A. Zona | 6,794 | (11) | 1,231 | |||||
| All directors, director nominees and executive officers as a group (14 persons) | 202,321 | (12) | 2,983 | |||||
| * | The beneficial owners identified in this table do not own more than 1% of outstanding Piper Jaffray common stock either individually or as a group. The holders of restricted stock identified in the footnotes below have no investment power with respect to the restricted stock. |
| ** | The shares of phantom stock may be settled solely in cash based on the fair market value of our common stock on the last day of the year in which the director’s service as a director terminates. The directors have no voting or investment power with respect to the phantom stock. |
| (1) | Includes 12,448 shares of restricted stock that vest in full on February 12, 2007, 28,963 shares of restricted stock that vest in full on February 22, 2008, 5,349 shares of common stock held directly and 507 shares of common stock held in the Piper Jaffray Companies Retirement Plan. |
| (2) | Consists of shares of common stock covered by options that are currently exercisable. | |
| (3) | Includes 3,991 shares of restricted stock that vest in full on February 12, 2007, 12,068 shares of restricted stock that vest in full on February 22, 2008, 277 shares of common stock held directly, 68 shares of common stock held in the Piper Jaffray Companies Retirement Plan and 11 shares of common stock held in an individual retirement account. | |
| (4) | Includes 500 shares of common stock held in an individual retirement account and 4,205 shares of common stock covered by options that are currently exercisable. |
| (5) | Includes 6,043 shares of common stock held in the Kaplan, Strangis & Kaplan profit-sharing trust for the benefit of Mr. Kaplan and 4,205 shares of common stock covered by options that are currently exercisable. |
| (6) | Includes 9,012 shares of restricted stock that vest in full on February 12, 2007, 8,689 shares of restricted stock that vest in full on February 22, 2008, 68 shares of common stock held in the Piper Jaffray Companies Retirement Plan and 178 shares held in an individual retirement account. | |
| (7) | Includes 6,502 shares of restricted stock that vest in full on February 12, 2007, 15,447 shares of restricted stock that vest in full on February 22, 2008, 197 shares of common stock held directly, 68 |
24
| shares of common stock held in the Piper Jaffray Companies Retirement Plan and 14 shares of common stock held in an individual retirement account. | ||
| (8) | Includes 1,798 shares of restricted stock that vest in full on February 12, 2007, 5,364 shares of restricted stock that vest in full on February 22, 2008, 502 shares of common stock held directly, 1,000 shares of common stock held in an individual retirement account and 2 shares of common stock held by Mr. Piper’s spouse. | |
| (9) | Includes 9,805 shares of restricted stock that vest in full on February 12, 2007, 31,377 shares of restricted stock that vest in full on February 22, 2008, 166 shares of common stock held directly and 68 shares of common stock held in the Piper Jaffray Companies Retirement Plan. |
| (10) | Includes 2,500 shares of common stock held directly and 4,205 shares of common stock covered by options that are currently exercisable. |
| (11) | Includes 2,589 shares of common stock held directly and 4,205 shares of common stock covered by options that are currently exercisable. |
| (12) | Includes 48,182 shares of restricted stock that vest in full on February 12, 2007, 112,593 shares of restricted stock that vest in full on February 22, 2008, 983 shares of common stock held in the Piper Jaffray Companies Retirement Plan, 7,756 shares held in a retirement or profit-sharing plan or account (other than the Piper Jaffray Companies Retirement Plan), 11,783 shares of common stock held directly or by family members, and 21,025 shares covered by options that are currently exercisable. |
| Shares of | |||||||||
| Piper Jaffray | |||||||||
| Name of Beneficial Owner | Common Stock | Percent of Class | |||||||
| T. Rowe Price Associates, Inc. | 1,377,578 | (1) | 6.66% | ||||||
| 100 E. Pratt Street | |||||||||
| Baltimore, Maryland 21202 | |||||||||
| (1) | This information is based on a Schedule 13G filed with the Securities and Exchange Commission on February 14, 2005, by T. Rowe Price Associates, Inc. T. Rowe Price Associates, Inc. reported that it has sole voting power as to 208,700 shares of common stock and shared investment power as to 1,377,578 shares of common stock. |
Because
25
2004.
2004.
non-employees.
19
To the extent permitted by the Sarbanes-Oxley Act of 2002, our directors and executive officers and their affiliates from time to time may be or may have been indebted to Piper Jaffray or our subsidiaries in connection with margin account loans. Such indebtedness is in the ordinary course of business, is on substantially on the same terms, including interest rates and collateral, as those prevailing at the time for comparable transactions with other persons and does not involve more than a normal risk of collectibility or present other unfavorable features.
26
| 1. | Reviewed and discussed with management and the independent | |
| 2. | Discussed with the independent | |
| 3. | Received the written disclosures and letter from the independent |
| 4. | Discussed with the independent |
20
| 2003 | 2002 | 2004 | 2003 | |||||||||||||
Audit Fees | $ | 494,990 | $ | 187,000 | $ | 753,215 | $ | 494,990 | ||||||||
Audit-Related Fees | 66,950 | 25,000 | $ | 51,000 | 66,950 | |||||||||||
Tax Fees | 162,528 | 0 | $ | 386,000 | 162,528 | |||||||||||
All Other Fees | 0 | 453,095 | 0 | 0 | ||||||||||||
| Total | $ | 724,468 | $ | 665,095 | $ | 1,190,315 | $ | 724,468 | ||||||||
| (1) | |
| IRA Keogh agreed-upon procedures and employee benefit plan audits. Audit-related services for 2003 primarily include services relating to agency selling group and IRA Keogh agreed-upon |
| (2) | Tax fees consist of tax compliance fees and |
| local estimated tax calculations, federal and state partnership tax returns, and foreign tax services performed for our U.K. subsidiary Piper Jaffray Ltd. Tax compliance services |
27
Any pre-approvals granted pursuant to this delegated authority are reported to the Audit Committee at its next regular meeting.
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ITEM 2 — APPROVAL OF THE PIPER JAFFRAY COMPANIES
Subject to shareholder approval, our Board of Directors has approved the Piper Jaffray Companies Amended and Restated 2003 Annual and Long-Term Incentive Plan, which is included as Appendix B to this proxy statement. Prior to our spin-off from U.S. Bancorp, our incentive plan was approved by our sole shareholder at that time, U.S. Bancorp Piper Jaffray Companies Inc., as well as by the compensation committee of U.S. Bancorp’s Board of Directors and by our Board of Directors. Our incentive plan was initially established before we were a public company listed on the New York Stock Exchange, and as a result, we were not required after the spin-off to seek shareholder approval of our incentive plan under the rules of the New York Stock Exchange.
The 2,000,000 maximum number of shares of common stock authorized for issuance under the plan as originally adopted prior to the spin-off is expected to cover equity award grants to employees, officers and directors through approximately the next 12 months. As a result, we are seeking shareholder approval of an amended and restated plan that increases the maximum number of shares that may be issued under the plan by 2,100,000 shares, for a total of 4,100,000 shares, which is expected to cover equity grants to employees, officers and directors over the subsequent two to three years. The amended and restated plan reflects our commitment to creating meaningful employee ownership in our company over time given the benefits we believe employee ownership provides, including the following:
Our commitment to employee ownership is consistent with the relatively high level of employee stock ownership in the financial services industry generally.
The plan is also being submitted for shareholder approval because it is designed to comply with Section 162(m) of the Internal Revenue Code of 1986 (the “Code”). Section 162(m) of the Code denies Piper Jaffray the ability to deduct compensation paid in excess of $1 million to the chief executive officer and each of the four other most highly compensated executive officers, except to the extent such compensation was performance-based and paid pursuant to a plan approved by our shareholders.
Additional amendments to the existing plan include:
February 22,
The Board of Directors recommends that you vote FOR approval of the Piper Jaffray Companies Amended and Restated 2003 Annual and Long-Term Incentive Plan. Proxies will be voted FOR approval of the plan unless otherwise specified.
The following paragraphs provide more detail about the plan, as amended and restated.
Purpose
The purpose of our incentive plan is to promote the interests of our company and our shareholders by giving us a competitive advantage in attracting, retaining and motivating officers, employees, directors and consultants, to offer these persons incentives directly linked to the profitability of our businesses and increases in our shareholder value, and to provide these persons an opportunity to acquire a proprietary interest in Piper Jaffray.
Eligible Individuals
Our directors, officers, employees and consultants and prospective directors, officers, employees and consultants, as well as those of our affiliates, are eligible to participate in our incentive plan. As of December 31, 2003, there were approximately 3,000 persons eligible to participate in our incentive plan.
Administration
Our incentive plan is administered by the Compensation Committee of our Board of Directors. The existing plan is being amended so that the Compensation Committee will administer awards to non-employee directors rather than the Nominating and Governance Committee. The committee administering our incentive plan will be referred to in this description as the “committee.” The committee is authorized to delegate certain administrative responsibilities to individuals selected at its discretion. The committee will determine the eligible individuals to whom and the time or times at which awards will be granted, the number of shares subject to awards to be granted to any eligible individual, the life of any award and any other terms and conditions of the grant, in addition to those contained in our incentive plan. Each grant under our incentive plan will be confirmed by and subject to the terms of an award agreement.
Authorized Shares
The maximum number of shares of common stock that may be delivered to participants and their beneficiaries under our incentive plan will be increased from 2,000,000 shares to 4,100,000 shares. The original 2,000,000 share amount is expected to cover award grants to employees, officers and directors over approximately the next 12 months. The additional 2,100,000 shares is expected to cover award grants to employees, officers and directors over the subsequent two to three years. With respect
23
Shares that may be issued under the plan may be authorized but unissued shares or shares reacquired and held in our treasury. The number of shares available for granting restricted stock and restricted stock units may not exceed 4,100,000, as compared to 2,000,000 shares under existing plan. No more than 250,000 shares of common stock may be subject to “qualified performance-based awards” granted to any eligible individual in any fiscal year of the company, as compared to 1,000,000 shares under the existing plan.
If an award entitles the holder to receive or purchase shares, the number of shares covered by the award or to which the award relates will be counted on the date of grant of the award against the aggregate number of shares available for granting awards under the plan. Any shares that are used by a participant as full or partial payment to us of the purchase price relating to an award, including in connection with the satisfaction of tax obligations relating to an award, will again be available for granting awards under the plan. In addition, if any shares covered by an award or to which an award relates are not purchased or are forfeited, or if an award otherwise terminates without delivery of any shares, then the number of shares counted against the aggregate number of shares available under the plan to the extent of any such forfeiture or termination will again be available for granting awards under the plan.
In the event of certain types of corporate transactions or restructurings, such as stock splits, mergers, consolidations, separations, spin-offs, liquidations, reorganizations or other distributions of stock or property of our company, including an extraordinary stock or cash dividend, the committee or our Board of Directors may make adjustments in the aggregate number and kind of shares reserved for issuance under our incentive plan, in the maximum share limitations upon stock options, stock appreciation rights and other awards to be granted to any individual, in the number, kind and exercise price or strike price of outstanding stock options and stock appreciation rights, in the number and kind of shares subject to other outstanding awards granted under our incentive plan and any other equitable substitutions or adjustments that the committee or our Board of Directors determines to be appropriate in its sole discretion.
Stock Options
The committee may grant stock options to eligible individuals. As amended and restated, only non-qualified stock options are permitted to be granted under the plan. The exercise price per share purchasable under a stock option will be determined by the committee, but, unless otherwise determined by the committee, the exercise price will not be less than 100 percent of the fair market value of a share on the date of grant. The term of each stock option will be fixed by the committee at the time of grant, but in no event may it be more than 10 years from the date of grant. The committee will determine the time or times at which a stock option may be exercised in whole or in part and the method or methods by which, and the form or forms in which, payment of the exercise price may be made or deemed to have been made.
Stock Appreciation Rights
The committee may grant stock appreciation rights to eligible individuals subject to the terms of the plan. Each stock appreciation right granted under the plan will confer on the holder upon exercise the right to receive, as determined by the committee, cash or a number of shares equal to the excess of (a) the fair market value of one share on the date of exercise (or, if the committee determines, at any
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Shares of restricted stock and restricted stock units (RSUs) will be subject to restrictions as the committee may impose, which may lapse separately or in combination at such time or times, in installments or otherwise as the committee may deem appropriate. The grant or vesting of restricted stock and RSUs may be performance-based or time-based or both. Restricted stock and RSUs may be “qualified performance-based awards,” in which event the grant or vesting, as applicable, of such restricted stock or RSUs will be conditioned upon the attainment of performance goals. Except as otherwise determined by the committee, upon a participant’s termination of employment (as determined under criteria established by the committee) during the restriction period, all shares of restricted stock and RSUs subject to restriction will be forfeited and reacquired by the company, except that the committee may waive in whole or in part any or all remaining restrictions with respect to shares of restricted stock or RSUs.
If the grant is intended to be a “qualified performance-based award,” these goals must be based on the attainment of specified levels of one or more of the following measures: revenue growth; earnings before interest, taxes, depreciation, and amortization; earnings before interest and taxes; operating income; pre- or after-tax income; earnings per share; cash flow; cash flow per share; return on equity; return on tangible equity; return on invested capital; return on assets; economic value added (or an equivalent metric); share price performance; total shareholder return; improvement in or attainment of expense levels; or improvement in or attainment of working capital levels. These goals may be established on a company-wide basis or with respect to one or more business units, divisions or subsidiaries and can be on an absolute or relative basis. A “qualified performance-based award” is a grant of restricted stock or RSUs designated as such by the committee at the time of grant based upon a determination that (1) the recipient is or may be a “covered employee” within the meaning of Section 162(m)(3) of the Code in the year in which we would expect to be able to claim a tax deduction with respect to such restricted stock unit awards and (2) the committee wishes such grant to qualify for the exemption from the limitation on deductibility of compensation with respect to any covered employee imposed by Section 162(m) of the Code. The committee will specify the performance goals to which any “qualified performance-based award” will be subject.
The provisions of restricted stock and RSUs including any applicable performance goals need not be the same with respect to each participant. During the restriction period, the committee may require that any stock certificates evidencing restricted shares be held by us. Other than these restrictions on transfer and any other restrictions the committee may impose, the participant will have all the rights of a holder of stock holding the class or series of stock that is the subject of the restricted stock award.
Performance Awards
The committee may grant performance awards to eligible individuals subject to the terms of the plan. A performance award (a) may be denominated or payable in cash, shares, other securities, other awards or other property and (b) will provide the holder with the right to receive payments, in whole or in part, upon the achievement of performance goals as the committee establishes. Subject to the terms of the plan, the performance goals to be achieved during any performance period, the length of any performance period, the amount of any performance award granted, the amount of any payment or transfer to be made pursuant to any performance award and any other terms and conditions of any
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Other Stock-Based Awards
Other awards of common stock and other awards that are valued by reference to, or otherwise based upon, common stock, including without limitation dividend equivalents and convertible debentures, may also be granted under our incentive plan, either alone or in conjunction with other awards.
Transferability of Awards
Awards are non-transferable other than by will or the laws of descent and distribution. However, in the discretion of the committee, non-qualified stock options may be transferred to members of the holder’s immediate family. The transfer may be made directly or indirectly or by means of a trust, partnership or otherwise. Stock options and stock appreciation rights may be exercised only by the initial holder, any such permitted transferee or a guardian, legal representative or beneficiary.
Change in Control
Notwithstanding any other provision of the plan to the contrary, unless otherwise provided by the committee in any award agreement, in the event of a change in control of Piper Jaffray any stock options and stock appreciation rights outstanding as of the date of such change in control, and which are not then exercisable and vested, will become fully exercisable and vested; the restrictions and deferral limitations applicable to any restricted stock and restricted stock units will lapse, and such restricted stock and restricted stock units will become free of all restrictions and become fully vested; all performance awards will be considered to be earned and payable in full; and any deferral or other restriction will lapse and such performance awards will be settled in cash or shares, as determined by the committee, as promptly as is practicable. All restrictions on other awards will lapse and such awards will become free of all restrictions and fully vested.
Amendments and Termination
Our Board of Directors may at any time amend, alter or discontinue our incentive plan, but no amendment may be made without the approval of our shareholders to the extent such approval is required by applicable law or stock exchange rules, and no amendment may be made that can increase the number of shares granted under the plan, without shareholder approval.
The committee may amend the terms of any outstanding stock option or other award but no such amendment may cause a “qualified performance-based award” to cease to qualify for the Section 162(m) exemption or impair the rights of any holder without the holder’s consent.
In the event an award is granted to an individual who is employed outside the United States and who is not compensated from a payroll maintained in the United States, the committee may, in its sole discretion, modify the provisions of the grant as they pertain to such individual to achieve the purposes of our incentive plan.
Term of the Plan
The plan will terminate on December 17, 2013, which is the tenth anniversary of the date the plan was initially approved by our sole shareholder, or on any earlier date of discontinuation or termination as determined by our Board of Directors.
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Registration
We have registered 2,000,000 shares of common stock that may be issued under the current plan on a registration statement on Form S-8. If this proposal is approved, we intend to register the additional 2,100,000 shares to be issued under our incentive plan on a registration statement on Form S-8.
Tax Consequences of Stock Options
The tax consequences of options granted under the plan are complex and depend, in large part, on the surrounding facts and circumstances. This section provides a brief summary of certain significant federal income tax consequences of the plan, under existing U.S. law. This summary is not a complete statement of applicable law and is based upon the Code, as well as administrative and judicial interpretations of the Code, as in effect on the date of this description. If federal tax laws, or interpretations of such laws, change in the future, the information provided here may no longer be accurate. This section does not consider state, local or foreign tax consequences, nor does it discuss the effect of gift, estate or inheritance taxes, except with respect to transferred options.
No later than the date as of which an amount first becomes includible in the gross income of a participant for federal income tax purposes with respect to any award under the plan, the participant must pay us, or make arrangements satisfactory to us regarding the payment of, any federal, state, local or foreign taxes of any kind required by law to be withheld with respect to such amount. Our obligations under the plan are conditional on such payment or arrangements, and we will, to the extent permitted by law, be entitled to take such action and establish such procedures as we deem appropriate to withhold or collect all applicable payroll, withholding, income or other taxes from a participant. In order to assist a participant in paying all or a portion of the federal, state, local and foreign taxes to be withheld or collected upon exercise or receipt of (or the lapse of restrictions relating to an award, the committee may permit a participant to satisfy tax obligations by (a) electing to have us withhold a portion of the shares or other property otherwise to be delivered upon exercise or receipt of (or the lapse of restrictions relating to) an award with a fair market value equal to the amount of such taxes or (b) delivering to us shares or other property other than shares issuable upon exercise or receipt of (or the lapse of restrictions relating to) such award with a fair market value equal to the amount of such taxes. Any such election must be made on or before the date that the amount of tax to be withheld is determined.
A participant will not recognize any taxable income and we will not be entitled to a deduction at the time a non-qualified option is granted. When a non-qualified option is exercised, the excess of the fair market value of the shares acquired on the exercise of the option over the exercise price will be taxable to a participant as ordinary income. We, in computing our U.S. federal income tax, will generally be entitled to a deduction in an amount equal to the compensation taxable to the participant, subject to certain limitations. When a participant sells his or her shares of stock, the participant generally will have a capital gain (or loss), depending on the difference between the sale price and the fair market value of the stock on the date the participant exercised his or her option. The capital gain (or loss) is considered “long term” or “short term” depending on how long the participant has held such stock.
Tax Consequences of Restricted Stock
Unless the participant files an election to be taxed under Section 83(b) of the Code, (a) the participant will not realize income upon the grant of restricted stock, (b) the participant will realize ordinary income and Piper Jaffray will be entitled to a corresponding deduction when the restrictions have been removed or expire and (c) the amount of such ordinary income and deduction will be the fair market value of the restricted stock on the date the restrictions are removed or expire. If the recipient files an election to be taxed under Section 83(b) of the Code, the tax consequences to the
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When the participant disposes of restricted stock, the difference between the amount received upon such disposition and the fair market value of such shares on the date the recipient realizes ordinary income will be treated as a capital gain or loss.
New Plan Benefits
Future plan awards to be received by or allocated to particular participants are not presently determinable.
Outstanding Equity Awards
The only equity plan we have established is our 2003 Long-Term Incentive Plan, which we are proposing in this proxy statement to amend and restate as described above. As of December 31, 2003, no awards had been granted under this plan. The following table summarizes, as of March 3, 2004, the number of shares of our common stock to be issued upon exercise of outstanding options granted under the plan since December 31, 2003, the weighted-average exercise price of such options, and the number of shares remaining available for future issuance under the plan.
| Number of Shares | ||||||||||||
| Weighted- | Remaining for | |||||||||||
| Number of Shares to | Average | Future Issuance | ||||||||||
| Be Issued upon | Exercise Price of | Under Equity | ||||||||||
| Exercise of | Outstanding | Compensation Plans | ||||||||||
| Outstanding | Options, | (Excluding Shares | ||||||||||
| Options, Warrants | Warrants and | In the First | ||||||||||
| Plan Category | And Rights (#) | Rights ($) | Column) (#) | |||||||||
| Equity compensation plans approved by shareholders | 298,564 | 47.57 | 1,222,444 | (1) | ||||||||
| Equity compensation plans not approved by shareholders | N/A | N/A | N/A | |||||||||
ITEM 32 — RATIFICATION OF SELECTION OF AUDITORSINDEPENDENT AUDITOR
Prior to our spin-off from U.S. Bancorp, the audit committee of U.S. Bancorp determined on November 8, 2002, in response to the Sarbanes-Oxley Act of 2002, to segregate the internal and external auditing functions performed for U.S. Bancorp and Piper Jaffray for 2002 by PricewaterhouseCoopers LLP. On that date, the audit committee of U.S. Bancorp determined to dismiss PricewaterhouseCoopers LLP as the external auditors of U.S. Bancorp and Piper Jaffray and appoint Ernst & Young LLP to become the external auditors following the filing of U.S. Bancorp’s 2002 Annual Report on Form 10-K during the first quarter of 2003. PricewaterhouseCoopers LLP completed the audit of our financial statements for the year ended December 31, 2002.
No report of PricewaterhouseCoopers LLP on the financial statements of Piper Jaffray for the past two fiscal years contained an adverse opinion or a disclaimer of opinion, or was qualified or modified as to uncertainty, audit scope or accounting principles. During our two most recent fiscal years, there were no disagreements with PricewaterhouseCoopers LLP on any matter of accounting principles or practices, financial statement disclosure or auditing scope or procedure which, if not resolved to the
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During our two most recent fiscal years, we did not consult with Ernst & Young LLP on any items regarding the application of accounting principles, the type of audit opinion that might be rendered on our financial statements, or the subject matter of a disagreement or reportable event (as described in Regulation S-K Item 304(a)(2)).
U.S. Bancorp reported the change in accountants on Form 8-K on November 14, 2002. The Form 8-K contained a letter from PricewaterhouseCoopers LLP, addressed to the Securities and Exchange Commission, stating that it agreed with the statements concerning PricewaterhouseCoopers LLP in such Form 8-K.
The Audit Committee of our Board of Directors has selected Ernst & Young LLP to continue to serve as our external auditorsindependent auditor for the year ending December 31, 2004.2005. While it is not required to do so, our Board of Directors is submitting the selection of Ernst & Young LLP for ratification in order to ascertain the views of our shareholders on this appointment.with respect to Ernst & Young LLP. If the selection is not ratified, our Audit Committee will reconsider its selection.
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| |
| Secretary |
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| (2) | in the event the director has a relationship that exceeds the limits described below, the Board determines in its judgment, after broad consideration of all relevant facts and circumstances, that the relationship is not material; and | |
| (3) | the Board reviews all commercial, banking, consulting, legal, accounting, charitable, familial and other relationships the director has with the Company that are not of a type described below, and determines in its judgment, after broad consideration of all relevant facts and circumstances, that the relationship is not material. |
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| I. | Purpose |
| II. | Membership |
The Committee shall consist of three or more members of the Board appointed from time to time by the Board. All of the members of the Committee shall be non-employee directors who meet the independence and experience requirements of the New York Stock Exchange (“NYSE”), Section 10A(m)(3) of the Securities Exchange Act of 1934 (the “Exchange Act”) and the rules and regulations of the Securities and Exchange Commission (the “SEC”). Each of the members of the Committee shall be financially literate or shall become so within a reasonable period of time after his or her appointment to the Committee. The Committee shall assist the Board in its determination as to whether atAt least one member of the Committee isshall be an “audit committee financial expert” as defined by SEC rules. The Committee ChairmanChairperson shall be appointed by the Board. The Committee may appoint a Secretary, who need not be a director. Committee members are subject to removal at any time by a majority of the Board. Any resulting vacancy may be filled by the Board.III. Meetings
The Committee shall meet as often as it determines, but not less frequently than quarterly. The Committee may request any officer or employee of the Company or external legal, accounting or other advisors to attend a meeting of the Committee or to meet with any members of, or consultants to, the Committee. In addition, the Committee shall have such other direct and independent interaction with management, the internal auditor and the independent auditor from time to time as the members of the Committee deem appropriate.IV. Resources and Authority
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| V. | Duties and Responsibilities |
| Oversee the Relationship with the Independent Auditor |
| 1. | Appoint, determine the compensation and retention terms for, and oversee the work of any independent auditor engaged for the purpose of preparing or issuing an audit report or performing other audit, review or attest services for the Company. | |
| 2. | Resolve disagreements between management and the independent auditor regarding financial reporting. | |
| 3. | At least annually, obtain and review a report by the independent auditor describing (a) its internal quality-control procedures, (b) any material issues raised by the most recent internal quality-control review, or peer review, of the firm, or by any inquiry or investigation by governmental or professional authorities, within the preceding five years, respecting one or more independent audits carried out by the firm, and any steps taken to deal with any such issues, and (c) all relationships between the independent auditor and the Company, in order to assess the auditor’s independence. | |
| 4. | Annually receive written notice from the independent auditor regarding its independence as required in Independence Standards Board Standard No. 1 and discuss with the independent auditor its independence. | |
| 5. | At least annually, evaluate the qualifications, performance and independence of the independent auditor, | |
| 6. | Review and evaluate the lead partner of the independent auditor team. | |
| 7. | Ensure the regular rotation of the lead audit partner having primary responsibility for the audit and the audit partner responsible for reviewing the audit, as required by law. | |
| Review the Company’s hiring policies with respect to employees and former employees of the independent auditor who participated in any capacity in the audit of the Company to ensure such hiring policies do not compromise the independence of the independent auditor. | ||
| Confirm that none of the independent auditor’s audit partners earn or receive compensation based on procuring engagements with the Company for providing products or services, other than audit review or attest services. |
| Meet with the independent auditor prior to the audit to discuss the planning and staffing of the audit. | ||
| Pre-approve all audit and permitted non-audit services (including the fees and terms thereof) to be performed for the Company by the independent auditor, subject to the de minimis exceptions for non-audit services described in Section 10A(i)(1)(B) of the Exchange Act that are approved by the Committee prior to the completion of the audit, considering whether the provision of any non-audit services is compatible with maintaining the independent auditor’s independence. | ||
| Discuss with the independent auditor issues on which the national office was consulted by the Company’s audit team and matters of audit quality and consistency. |
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| Oversee the Integrity of the Company’s Financial Statements and Disclosures |
| Meet to review and discuss with management and the independent auditor the Company’s annual audited financial statements, including reviewing the Company’s specific disclosures under “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” and recommend to the |
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| Board whether the annual audited financial statements should be included in the Company’s Form 10-K. | ||
| Meet to review and discuss with management and the independent auditor the Company’s quarterly financial statements, including reviewing the Company’s specific disclosures under “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” prior to the filing of | ||
| Discuss with management and the independent auditor significant financial reporting issues and judgments made in connection with the preparation of the Company’s financial statements, including any significant changes in the Company’s selection or application of accounting | ||
| 16. | Review and discuss with management and the independent auditor any major issues as to the adequacy of the Company’s internal controls, | |
| Review and discuss with management (including the senior internal audit executive) and the independent auditor the Company’s internal controls report and the independent auditor’s attestation of the report, prior to the filing of the Company’s Form 10-K. | ||
| 18. | Review and discuss with the independent auditor (a) all critical accounting policies and practices to be used; (b) all alternative treatments of financial information within generally accepted accounting principles (“GAAP”) that have been discussed with management, ramifications of the use of such alternative disclosures and treatments, and the treatment preferred by the independent auditor; and (c) other material written communications between the independent auditor and management, such as any management letter or schedule of unadjusted differences. | |
| Discuss generally with management the types of information to be disclosed and the types of | ||
| Discuss with management and the independent auditor the effect of regulatory and accounting initiatives, as well as off-balance sheet structures, on the Company’s financial statements. | ||
| Review disclosures made to the Committee by the Company’s chief executive officer and chief financial officer during their certification process for the Form 10-K and Forms 10-Q about any significant deficiencies in the design or operation of internal controls or material weaknesses therein and any fraud involving management or other employees who play a significant role in the Company’s internal controls. | ||
| Discuss with the independent auditor the matters required to be discussed by Statement on Auditing Standards No. 61 relating to the conduct of the audit, and review with the independent auditor any difficulties encountered in the course of the audit work, including any restrictions on the scope of the independent auditor’s activities or on its access to requested information, and any significant disagreements with management, and management’s response to such problems or difficulties. |
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| Oversee the Company’s Internal Audit Function |
| Review the appointment and replacement of the senior internal audit executive. | ||
| Review the significant reports to management prepared by the internal | ||
| Discuss with the independent auditor and management the responsibilities, budget and staffing of the Company’s internal audit function and the planned scope of the internal audit. |
| Oversee the Company’s Compliance with Legal and Regulatory Requirements |
| Obtain from the independent auditor assurance that Section 10A(b) of the Exchange Act has not been implicated. | ||
| Annually review the responsibilities, budget and staffing of the Company’s compliance department. | ||
| 28. | Review the Company’s annual report to management regarding supervisory systems and procedures required by the NYSE. |
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| Annually review the budgeting and expense allocation process with respect to the Company’s investment research operations to ensure that such budgeting and expense allocation are performed by senior management of the Company without input from the Company’s investment banking professionals and without regard to specific revenues or results derived from the Company’s investment banking operations, though revenues and results of the Company as a whole may be considered in determining the investment research budget and allocation of investment research expenses. | ||
| Oversee administration of the Company’s Code of Ethics and Business Conduct and, as appropriate, consider and approve any amendments to, or waivers granted to the Company’s executive officers under, provisions of such Code. | ||
| Establish procedures for the receipt, retention and treatment of complaints regarding the Company’s accounting, internal accounting controls or auditing matters, and the confidential, anonymous submission by Company employees of concerns regarding questionable accounting or auditing matters. | ||
| Discuss with management and the independent auditor any correspondence with regulators or governmental agencies and any published reports that raise material issues regarding the Company’s financial statements or accounting policies. | ||
| Discuss with the Company’s General Counsel legal matters that may have a material impact on the financial statements or the Company’s compliance with legal or regulatory requirements. | ||
| Produce an annual report for inclusion in the Company’s proxy statement for its annual shareholders meeting, in accordance with applicable rules and regulations. |
| Other Duties and Responsibilities |
| Regularly discuss the Company’s major financial risk exposures, the steps management has taken to monitor and control such exposures, and guidelines and policies to govern the Company’s risk assessment and risk management processes. | ||
| Regularly meet with management (including the chief financial and accounting officer), the internal | ||
| Annually review and reassess the adequacy of this Charter and recommend to the Board any proposed changes to this Charter. | ||
| Annually review and evaluate the Committee’s own performance. |
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| Report regularly to the Board on the Committee’s activities, specifically including a review of any issues that arise with respect to the quality or integrity of the Company’s financial statements, the Company’s compliance with legal or regulatory requirements, the performance and independence of the Company’s independent |
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PIPER JAFFRAY COMPANIES
AMENDED AND RESTATED
SECTION 1. Purpose
The purpose of the Plan is to promote the interests of the Company and its stockholders by giving the Company a competitive advantage in attracting, retaining and motivating employees, officers, consultants and Directors capable of assuring the future success of the Company, to offer such persons incentives that are directly linked to the profitability of the Company’s businesses and increases in stockholder value, and to afford such persons an opportunity to acquire a proprietary interest in the Company.
SECTION 2. Definitions
As used in the Plan, the following terms shall have the meanings set forth below.
(a) “Affiliate” means any entity that, directly or indirectly through one or more intermediaries, is controlled by, controlling or under common control with the Company.
(b) “Award” means any Stock Option, Stock Appreciation Right, Restricted Stock, Restricted Stock Unit, Performance Award, Dividend Equivalent, Other Stock Grant, Other Stock-Based Award or Tax Offset Bonus granted under the Plan.
(c) “Award Agreement” means any written agreement, contract or other instrument or document evidencing any Award granted under the Plan. Each Award Agreement shall be subject to the applicable terms and conditions of the Plan and any other terms and conditions (not inconsistent with the Plan) determined by the Committee.
(d) “Board” means the Board of Directors of the Company.
(e) “Code” means the Internal Revenue Code of 1986, as amended from time to time, and any regulations promulgated thereunder.
(f) “Change in Control”has the meaning set forth in Section 7.
(g) “Committee” means a committee of Directors designated by the Board to administer the Plan, which initially shall be the Compensation Committee of the Board. The Committee shall be comprised of not less than such number of Directors as shall be required to permit Awards granted under the Plan to qualify under Rule 16b-3 and Section 162(m) of the Code, and each member of the Committee shall be an Outside Director.
(h) “Company” means Piper Jaffray Companies, a Delaware corporation.
(i) “Covered Employee” means a Participant designated prior to the grant of Restricted Stock, Restricted Stock Units or Performance Awards by the Committee who is or may be a “covered employee” within the meaning of Section 162(m)(3) of the Code in the year in which any such Award is expected to be taxable to such Participant.
(j) “Director” means a member of the Board, including any Outside Director.
(k) “Dividend Equivalent” means any right granted under Section 6(e) of the Plan.
(l) “Effective Date”has the meaning set forth in Section 11 of the Plan.
(m) “Eligible Individual” means any employee, officer, Director or consultant providing services to the Company or any Affiliate, and prospective employees and consultants who have accepted offers
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(n) “Exchange Act” means the Securities Exchange Act of 1934, as amended from time to time.
(o) “Exercise Price”has the meaning set forth in Section 6(a) of the Plan.
(p) “Fair Market Value” means, with respect to any property (including, without limitation, any Shares or other securities), the fair market value of such property determined by such methods or procedures as shall be established from time to time by the Committee. Notwithstanding the foregoing and except as otherwise provided by the Committee, the Fair Market Value of a Share as of a given date shall be the closing sales price for one Share on the New York Stock Exchange or such other national securities market or exchange as may at the time be the principal market for the Shares, or if the Shares were not traded on such national securities market or exchange on such date, then on the next preceding date on which the Shares are traded, all as reported by such source as the Committee may select.
(q) “Non-Qualified Stock Option” means any Stock Option granted under Section 6(a) of the Plan that is not designated as, or is not intended to qualify as, an “incentive stock option” within the meaning of Section 422 of the Code.
(r) “Outside Director” means any Director who qualifies as an “outside director” within the meaning of Section 162(m) of the Code and as a “non-employee director” within the meaning of Rule 16b-3.
(s) “Participant” means an Eligible Individual designated to be granted an Award under the Plan.
(t) “Performance Award” means any right granted under Section 6(d) of the Plan.
(u) “Performance Goals” means the performance goals established by the Committee in connection with the grant of an Award. In the case of Qualified Performance-Based Awards, (i) such goals shall be based on the attainment of specified levels of one or more of the following measures with respect to the Company or such subsidiary, division or department of the Company for or within which the Participant perform services: revenue growth; earnings before interest, taxes, depreciation, and amortization; earnings before interest and taxes; operating income; pre- or after- tax income; earnings per share; cash flow; cash flow per share; return on equity; return on tangible equity; return on invested capital; return on assets; economic value added (or an equivalent metric); share price performance; total shareholder return; improvement in or attainment of expense levels; improvement in or attainment of working capital levels and (ii) such Performance Goals shall be set by the Committee within the time period prescribed by Section 162(m) of the Code and related regulations. Such Performance Goals also may be based upon the attaining of specified levels of Company performance under one or more of the measures described above relative to the performance of other companies.
(v) “Plan” means this Piper Jaffray Companies Amended and Restated 2003 Annual and Long-Term Incentive Plan, as set forth herein and as hereinafter amended from time to time.
(w) “Qualified Performance-Based Award” means an Award of Restricted Stock, Restricted Stock Units or Performance Awards designated as such by the Committee at the time of grant, based upon a determination that (i) the recipient is or may be a Covered Employee in the year in which the Company would expect to be able to claim a tax deduction with respect to such Restricted Stock or Performance Awards and (ii) the Committee wishes such Award to qualify for the Section 162(m) Exemption.
(x) “Restricted Stock” means any Share granted under Section 6(c) of the Plan.
(y) “Restricted Stock Unit” means any unit granted under Section 6(c) of the Plan evidencing the right to receive a Share (or a cash payment equal to the Fair Market Value of a Share) at some future date.
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(z) “Rule 16b-3” means Rule 16b-3, as promulgated by the Securities and Exchange Commission under Section 16(b) of the Exchange Act, as amended from time to time.
(aa) “Section 162(m) Exemption” means the exemption from the limitation on deductibility imposed by Section 162(m) of the Code that is set forth in Section 162(m)(4)(C) of the Code.
(bb) “Share” or “Shares” means a share or shares of common stock, par value $.01 per share, of the Company.
(cc) “Stock Appreciation Right” means any right granted under Section 6(b) of the Plan.
(dd) “Stock Option” means a Non-Qualified Stock Option granted under Section 6(a) of the Plan.
SECTION 3. Administration
(a) Power and Authority of the Committee.The Plan shall be administered by the Committee. Subject to the terms of the Plan and to applicable law, the Committee shall have full power and authority to:
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Unless otherwise expressly provided in the Plan, all designations, determinations, interpretations and other decisions under or with respect to the Plan or any Award or Award Agreement shall be within the sole discretion of the Committee, may be made at any time and shall be final, conclusive and binding upon all persons, including without limitation, the Company, its Affiliates, subsidiaries, shareholders, Eligible Individuals and any holder or beneficiary of any Award.
(b) Action by the Committee; Delegation. Except to the extent prohibited by applicable law or the applicable rules of a stock exchange, the Committee may delegate all or any part of its duties and powers under the Plan to one or more persons, including Directors or a committee of Directors, subject to such terms, conditions and limitations as the Committee may establish in its sole discretion; provided, however, that the Committee shall not delegate its powers and duties under the Plan (i) with regard to officers or directors of the Company or any Affiliate who are subject to Section 16 of the Exchange Act or (ii) in a manner that would cause an Award designated as a Qualified Performance-Based Award not to qualify for, or to cease to qualify for, the Section 162(m) Exemption; andprovided, further,that any such delegation may be revoked by the Committee at any time.
(c) Power and Authority of the Board. Notwithstanding anything to the contrary contained herein, except to the extent that the grant or exercise of such authority would cause any Award or transaction to become subject to (or lose an exemption under) the short-swing profit recovery provisions of Section 16 of the Exchange Act or cause an Award designated as a Qualified Performance-Based Award not to qualify for, or to cease to qualify for, the Section 162(m) Exemption, the Board may, at any time and from time to time, without any further action of the Committee, exercise the powers and duties of the Committee under the Plan. To the extent that any permitted action taken by the Board conflicts with action taken by the Committee, the Board action shall control.
SECTION 4. Shares Available for Awards
(a) Shares Available. Subject to adjustment as provided in Section 4(c) of the Plan, the aggregate number of Shares that may be issued under the Plan shall be 4,100,000. Shares that may be issued under the Plan may be authorized but unissued Shares or Shares re-acquired and held in treasury. Notwithstanding the foregoing, the number of Shares available for granting Restricted Stock and Restricted Stock Units shall not exceed 4,100,000, subject to adjustment as provided in Section 4(c) of the Plan.
(b) Accounting for Awards. For purposes of this Section 4, if an Award entitles the holder thereof to receive or purchase Shares, the number of Shares covered by such Award or to which such Award relates shall be counted on the date of grant of such Award against the aggregate number of Shares available for granting Awards under the Plan. Any Shares that are used by a Participant as full or partial payment to the Company of the purchase price relating to an Award, including in connection with the satisfaction of tax obligations relating to an Award, shall again be available for granting Awards under the Plan. In addition, if any Shares covered by an Award or to which an Award relates are not purchased or are forfeited, or if an Award otherwise terminates without delivery of any Shares, then the number of Shares counted against the aggregate number of Shares available under the Plan with respect to such Award, to the extent of any such forfeiture or termination, shall again be available for granting Awards under the Plan.
(c) Adjustments. In the event of any change in corporate capitalization (including, but not limited to, a change in the number of Shares outstanding), such as a stock split or a corporate transaction, such as any merger, consolidation, separation, including a spin-off, or other distribution of stock or property of the Company (including any extraordinary cash or stock dividend), any reorganization (whether or not such reorganization comes within the definition of such term in Section 368 of the Code) or any partial or complete liquidation of the Company, the Committee or Board may make such substitution or adjustments in the aggregate number and kind of shares reserved for issuance under the Plan, and the maximum limitation upon Stock Options and Stock Appreciation
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(d) Award Limitations. No more than 250,000 shares of Common Stock may be subject to Qualified Performance-Based Awards granted to any Eligible Individual in any fiscal year of the Company.
SECTION 5. Eligibility
Any Eligible Individual shall be eligible to be designated a Participant. In determining which Eligible Individuals shall receive an Award and the terms of any Award, the Committee may take into account the nature of the services rendered by the respective Eligible Individuals, their present and potential contributions to the success of the Company or such other factors as the Committee, in its discretion, shall deem relevant.
SECTION 6. Awards
(a) Stock Options. The Committee is hereby authorized to grant Stock Options (which may only be Non-Qualified Stock Options) to Eligible Individuals with the following terms and conditions and with such additional terms and conditions not inconsistent with the provisions of the Plan as the Committee shall determine:
(b) Stock Appreciation Rights. The Committee is hereby authorized to grant Stock Appreciation Rights to Eligible Individuals subject to the terms of the Plan. Each Stock Appreciation Right granted under the Plan shall confer on the holder upon exercise the right to receive, as determined by the Committee, cash or a number of Shares equal to the excess of (A) the Fair Market Value of one Share on the date of exercise (or, if the Committee shall so determine, at any time during a specified period before or after the date of exercise) over (B) the grant price of the Stock Appreciation Right as determined by the Committee, which grant price shall not be less than 100% of the Fair Market Value of one Share on the date of grant of the Stock Appreciation Right, unless otherwise determined by the
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(c) Restricted Stock and Restricted Stock Units. The Committee is hereby authorized to grant Restricted Stock and Restricted Stock Units to Eligible Individuals with the following terms and conditions and with such additional terms and conditions not inconsistent with the provisions of the Plan as the Committee shall determine:
(d) Performance Awards. The Committee is hereby authorized to grant Performance Awards to Eligible Individuals subject to the terms of the Plan. A Performance Award granted under the Plan (i) may be denominated or payable in cash, Shares (including, without limitation, Restricted Stock and Restricted Stock Units), other securities, other Awards or other property and (ii) shall confer on the holder thereof the right to receive payments, in whole or in part, upon the achievement of such performance goals during such performance periods as the Committee shall establish. Subject to the terms of the Plan, the performance goals to be achieved during any performance period, the length of
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(e) Dividend Equivalents. The Committee is hereby authorized to grant Dividend Equivalents to Eligible Individuals under which the Participant shall be entitled to receive payments (in cash, Shares, other securities, other Awards or other property as determined in the discretion of the Committee) equivalent to the amount of cash dividends paid by the Company to holders of Shares with respect to a number of Shares determined by the Committee. Subject to the terms of the Plan, such Dividend Equivalents may have such terms and conditions as the Committee shall determine.
(f) Other Stock Grants. The Committee is hereby authorized, subject to the terms of the Plan, to grant to Eligible Individuals Shares without restrictions thereon as are deemed by the Committee to be consistent with the purpose of the Plan.
(g) Other Stock-Based Awards. The Committee is hereby authorized to grant to Eligible Individuals, subject to the terms of the Plan, such other Awards that are denominated or payable in, valued in whole or in part by reference to, or otherwise based on or related to, Shares (including, without limitation, securities convertible into Shares), as are deemed by the Committee to be consistent with the purpose of the Plan. Shares or other securities delivered pursuant to a purchase right granted under this Section 6(g) shall be purchased for such consideration, which may be paid by such method or methods and in such form or forms (including, without limitation, cash, Shares, other securities, other Awards or other property or any combination thereof), as the Committee shall determine, the value of which consideration, as established by the Committee, shall not be less than 100% of the Fair Market Value of such Shares or other securities as of the date such purchase right is granted, unless otherwise determined by the Committee.
(h) Tax Offset Bonus. The Committee may grant to a Participant, at the time of granting an Award or at any time thereafter, the right to receive a cash payment in an amount specified by the Committee, to be paid at such time or times (if ever) as the Award results in compensation income to the Participant, for the purpose of assisting the Participant to pay the resulting taxes, all as determined by the Committee and on such other terms and conditions as the Committee shall determine (a“Tax Offset Bonus”).
(i) General.
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SECTION 7. Change in Control
(a) Impact of Event. Notwithstanding any other provision of the Plan to the contrary, unless otherwise provided by the Committee in any Award Agreement, in the event of a Change in Control:
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(b) Definition of Change in Control. For purposes of the Plan, a “Change in Control” shall mean the happening of any of the following events:
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SECTION 8. Income Tax Withholding
No later than the date as of which an amount first becomes includible in the gross income of a Participant for federal income tax purposes with respect to any Award under the Plan, the Participant shall pay to the Company, or make arrangements satisfactory to the Company regarding the payment of, any federal, state, local or foreign taxes of any kind required by law to be withheld with respect to such amount. The obligations of the Company under the Plan shall be conditional on such payment or arrangements, and the Company and its Affiliates shall, to the extent permitted by law, be entitled to take such action and establish such procedures as it deems appropriate to withhold or collect all applicable payroll, withholding, income or other taxes from such Participant. In order to assist a Participant in paying all or a portion of the federal, state, local and foreign taxes to be withheld or collected upon exercise or receipt of (or the lapse of restrictions relating to) an Award, the Committee, in its discretion and subject to such additional terms and conditions as it may adopt, may permit the Participant to satisfy such tax obligation by (i) electing to have the Company withhold a portion of the Shares or other property otherwise to be delivered upon exercise or receipt of (or the lapse of restrictions relating to) such Award with a Fair Market Value equal to the amount of such taxes or (ii) delivering to the Company Shares or other property other than Shares issuable upon exercise or receipt of (or the lapse of restrictions relating to) such Award with a Fair Market Value equal to the amount of such taxes,provided that, in either case, not more than the legally required minimum withholding may be settled with Shares. Any such election must be made on or before the date that the amount of tax to be withheld is determined.
SECTION 9. Amendment and Termination
(a) Amendments to the Plan. The Board may amend, alter, suspend, discontinue or terminate the Plan at any time; provided, however, that, notwithstanding any other provision of the Plan or any Award Agreement, without the approval of the stockholders of the Company, no amendment, alteration, suspension, discontinuation or termination shall be made that, absent such approval:
(b) Amendments to Awards. The Committee may waive any conditions of or rights of the Company under any outstanding Award, prospectively or retroactively. Except as otherwise provided herein or in an Award Agreement, the Committee may not amend, alter, suspend, discontinue or terminate any outstanding Award, prospectively or retroactively, if such action would adversely affect the rights of the holder of such Award, without the consent of the Participant or holder or beneficiary thereof or such amendment would cause a Qualified Performance-Based Award to cease to qualify for the Section 162(m) Exemption.
(c) Correction of Defects, Omissions and Inconsistencies. The Committee may correct any defect, supply any omission or reconcile any inconsistency in the Plan or any Award in the manner and to the extent it shall deem desirable to carry the Plan into effect.
SECTION 10. General Provisions
(a) No Rights to Awards. No Eligible Individual or other person shall have any claim to be granted any Award under the Plan, and there is no obligation for uniformity of treatment of Eligible Individuals or holders or beneficiaries of Awards under the Plan. The terms and conditions of Awards need not be the same with respect to any Participant or with respect to different Participants.
(b) Award Agreements. No Participant will have rights under an Award granted to such Participant unless and until an Award Agreement shall have been duly executed on behalf of the
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(c) No Rights of Stockholders. Except with respect to Shares of Restricted Stock as to which the Participant has been granted the right to vote, neither a Participant nor the Participant’s legal representative shall be, or have any of the rights and privileges of, a stockholder of the Company with respect to any Shares issuable to such Participant upon the exercise or payment of any Award, in whole or in part, unless and until such Shares have been issued in the name of such Participant or such Participant’s legal representative without restrictions thereto.
(d) No Limit on Other Compensation Plans or Arrangements. Nothing contained in the Plan shall prevent the Company or any Affiliate from adopting or continuing in effect other or additional compensation arrangements, and such arrangements may be either generally applicable or applicable only in specific cases.
(e) No Right to Employment. The Plan shall not constitute a contract of employment, and adoption of the Plan or the grant of an Award shall not be construed as giving a Participant the right to be retained as an employee of the Company or an Affiliate, or a non-employee Director to be retained as a Director, nor shall it affect in any way the right of the Company or an Affiliate to terminate such employment at any time, with or without cause. In addition, the Company or an Affiliate may at any time dismiss a Participant from employment free from any liability or any claim under the Plan or any Award, unless otherwise expressly provided in the Plan or in any Award Agreement.
(f) Governing Law. The Plan and all Awards granted and actions taken thereunder shall be governed by and construed in accordance with the laws of the State of Delaware, without reference to principles of conflict of laws thereof.
(g) Severability. If any provision of the Plan or any Award is or becomes or is deemed to be invalid, illegal or unenforceable in any jurisdiction or would disqualify the Plan or any Award under any law deemed applicable by the Committee, such provision shall be construed or deemed amended to conform to applicable laws, or if it cannot be so construed or deemed amended without, in the determination of the Committee, materially altering the purpose or intent of the Plan or the Award, such provision shall be stricken as to such jurisdiction or Award, and the remainder of the Plan or any such Award shall remain in full force and effect.
(h) Application to Participants Outside the United States. In the event an Award is granted to a Participant who is employed or providing services outside the United States and who is not compensated from a payroll maintained in the United States, the Committee may, in its sole discretion, modify the provisions of the Plan as they pertain to such individual to comply with applicable foreign law.
(i) No Trust or Fund Created. Neither the Plan nor any Award shall create or be construed to create a trust or separate fund of any kind or a fiduciary relationship between the Company or any Affiliate and an Eligible Individual or any other person. To the extent that any person acquires a right to receive payments from the Company or any Affiliate pursuant to an Award, such right shall be no greater than the right of any unsecured general creditor of the Company or any Affiliate.
(j) Other Benefits. No compensation or benefit awarded to or realized by any Participant under the Plan shall be included for the purpose of computing such Participant’s compensation under any compensation-based retirement, disability, or similar plan of the Company unless required by law or otherwise provided by such other plan.
(k) No Fractional Shares. No fractional Shares shall be issued or delivered pursuant to the Plan or any Award, and the Committee shall determine whether cash shall be paid in lieu of any fractional
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(l) Headings. Headings are given to the Sections and subsections of the Plan solely as a convenience to facilitate reference. Such headings shall not be deemed in any way material or relevant to the construction or interpretation of the Plan or any provision thereof.
(m) Section 16 Compliance; Section 162(m) Administration. The Plan is intended to comply in all respects with Rule 16b-3 or any successor provision, as in effect from time to time, and in all events the Plan shall be construed in accordance with the requirements of Rule 16b-3. If any Plan provision does not comply with Rule 16b-3 as hereafter amended or interpreted, the provision shall be deemed inoperative. The Board, in its absolute discretion, may bifurcate the Plan so as to restrict, limit or condition the use of any provision of the Plan with respect to persons who are officers or directors subject to Section 16 of the Exchange Act without so restricting, limiting or conditioning the Plan with respect to other Eligible Individuals. The Company intends that all Stock Options and Stock Appreciation Rights granted under the Plan to individuals who are or who the Committee believes will be Covered Employees will constitute “qualified performance-based compensation” within the meaning of Section 162(m) of the Code.
(n) Conditions Precedent to Issuance of Shares. Shares shall not be issued pursuant to the exercise or payment of the Exercise Price or purchase price relating to an Award unless such exercise or payment and the issuance and delivery of such Shares pursuant thereto shall comply with all relevant provisions of law, including, without limitation, the Securities Act of 1933, as amended from time to time, the Exchange Act, the rules and regulations promulgated thereunder, the requirements of any applicable stock exchange and the Delaware General Corporation Law. As a condition to the exercise or payment of the Exercise Price or purchase price relating to such Award, the Company may require that the person exercising or paying the Exercise Price or purchase price represent and warrant that the Shares are being purchased only for investment and without any present intention to sell or distribute such Shares if, in the opinion of counsel for the Company, such a representation and warranty is required by law.
SECTION 11. Effective Date of Plan
Upon its adoption by the Board, the Plan shall be submitted for approval by the stockholders of the Company and shall be effective as of the date of such approval (the “Effective Date”).
SECTION 12. Term of the Plan
The Plan will terminate on the tenth anniversary of the Effective Date or any earlier date of discontinuation or termination established pursuant to Section 9 of the Plan. However, unless otherwise expressly provided in the Plan or in an applicable Award Agreement, any Award theretofore granted may extend beyond such date, and the authority of the Committee provided for hereunder with respect to the Plan and any Awards, and the authority of the Board to amend the Plan, shall extend beyond the termination of the Plan.
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LOCATION OF PIPER JAFFRAY COMPANIES ANNUAL MEETING OF SHAREHOLDERS
PROXY
SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
FOR THE 20042005 ANNUAL MEETING OF SHAREHOLDERS
The undersigned, having received the Notice of Annual Meeting of Shareholders and proxy statement, revoking any proxy previously given, hereby appoint(s) Andrew S. Duff, James L. Chosy and Sandra G. Sponem, and any of them, as proxies to vote as directed all shares the undersigned is (are) entitled to vote at the Piper Jaffray Companies 2004 Annual Meeting of Shareholders and authorize(s) each to vote in his or her discretion upon other business as may properly come before the meeting or any adjournment or postponement thereof.If this signed proxy card contains no specific voting instructions, my (our) shares will be voted “FOR” all nominees for director, “FOR” Items 2 and 3, and in the discretion of the named proxies on all other matters.
IF YOU DO NOT VOTE BY TOUCH-TONE PHONE OR INTERNET, PLEASE MARK, SIGN AND DATE THIS PROXY CARD ON THE REVERSE SIDE AND RETURN IT IN THE ENCLOSED ENVELOPE.
The undersigned, having received the Notice of Annual Meeting of Shareholders and Proxy Statement, revoking any proxy previously given, hereby appoint(s) Andrew S. Duff, James L. Chosy and Sandra G. Sponem, and any of them, as proxies to vote as directed all shares the undersigned is (are) entitled to vote at the Piper Jaffray Companies 2005 Annual Meeting of Shareholders and authorize(s) each to vote in his or her discretion upon other business as may properly come before the meeting or any adjournment or postponement thereof.If this signed proxy card contains no specific voting instructions, my (our) shares will be voted “FOR” both nominees for director, “FOR” Item 2, and in the discretion of the named proxies on all other matters. | |||
| IF YOU DO NOT VOTE BY TOUCH-TONE TELEPHONE OR INTERNET, PLEASE MARK, SIGN AND DATE THIS PROXY CARD ON THE REVERSE SIDE AND RETURN IT IN THE ENCLOSED ENVELOPE. |
(Continued on reverse side)
Address Change/Comments (Mark the corresponding box on the reverse side)
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You can now access your Piper Jaffray Companies account online.
Access your Piper Jaffray Companies shareholder account online via Investor ServiceDirect®ServiceDirect® (ISD).
Mellon Investor Services LLC, transfer agent for Piper Jaffray Companies, now makes it easy and convenient to get current information on your shareholder account.
Ÿ View account status | ||||
| ŸView payment history for dividends | ||||
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The Board of Directors recommends a vote FOR Items 1, 2 and 3.
| The Board of Directors recommends a vote FOR Items 1 and 2. | Please Mark Here for Address Change or Comments SEE REVERSE SIDE |
o
| FOR ALL | WITHHOLD | |||||||||||||||
| ITEM 1. | Election of Class II Directors to serve until the annual meeting in 2008. | (except as specified below | AUTHORITY to vote for all | |||||||||||||
| Nominees: | ||||||||||||||||
| 01 Michael R. Francis | ||||||||||||||||
| 02 Addison L. Piper | o | o | ||||||||||||||
| To withhold authority to vote for either nominee, write the number of the nominee in the space provided below: | ||||||||||||||||
| Signature |
| FOR | AGAINST | ABSTAIN | ||||||||||||||
| ITEM 2. | Ratify selection of Ernst & Young LLP as independent auditor for 2005. | o | o | o | ||||||||||||
| I PLAN TO ATTEND THE MEETING | o | |||||||||||||||
ChooseMLinksm for fast, easy and secure 24/7 online access to your future proxy materials, investment plan statements, tax documents and more. Simply log on toInvestor ServiceDirect® at www.melloninvestor.com/isd where step-by step instructions will prompt you through enrollment.
| Signature | Date | |||||||||||||||||
NOTE: Please sign as name appears hereon. Joint owners should each sign. When signing as attorney, executor, administrator, trustee or guardian, or on behalf of a corporation or partnership as an authorized officer, please give full title as such.
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Vote by Internet or Telephone or Mail
24 Hours a Day, 7 Days a Week
Internet and telephone voting is available through 11:59 PM Eastern Time
the day prior to annual meeting day.
Internet and telephone voting is available through 11:59 PM Eastern Timethe day prior to annual meeting day.
Your Internet or telephone vote authorizes the named proxies to vote your shares in the same manner
as if you marked, signed and returned your proxy card.
Internet http://www.proxyvoting.com/pjc Use the Internet to vote your
| OR |
Mail Mark, sign and date your proxy card and return it in the enclosed postage-paid envelope. |
If you vote your proxy by Internet or by telephone,
you do NOT need to mail back your proxy card.
You can view the Annual Report and Proxy Statement
on the Internet at www.piperjaffray.com